Chipotle Essay

Chipotle is in the fast casual segment of the industry, they offer portable convenient food focused on fresh healthful ingredients and customizable dishes. Their price points are typically lower than full service dining. This segment is one of the fastest growing in the industry since consumers are gradually shifting focus to more health conscious meal choices. Given that, Chipotle has some intense rivalry in the market. Their biggest competitors are Taco Bell and Qdoba, since they both serve Mexican food in a fast casual manner. Chipotle also competes with supermarkets, since they give consumers the option to purchase ingredients to cook at home or consumers are able to purchase precooked, frozen meals. Taco Bell, Qdoba and Supermarkets can also be considered substitutes for Chipotles food offerings because they all serve similar food choices in the market. However, Chipotles food quality and ethical buying sets them apart in the market. Due to the intense competition in the market, new entrants are a threat

The barriers to entry are relatively low due to the low start-up cost of the business. The fast casual dining segment is also in its growth phase, therefore many competitors are competing for market share in the industry. Since Chipotle effectively uses a differentiation strategy to gain market share, they incur higher food costs. Naturally raised meats, organic grown vegetables and beans, as well as rBGh free dairy products, come at a higher price than the processed foods than are commonly used in the fast food industry. Therefore, Chipotle directly negotiates with their suppliers to ensure that the products meet their standards. The supplier is expected to supply products that align with Chipotles goal of